In it, he made three statements. One of them was true. Two of
them were not.
I'm calling them lies, but I'll admit that it's never never clear
if Trump knows whether he's not telling the truth or just doesn't
have his facts straight. So you can call them whatever you want.

Ad

Here's what he said:

"Did China ask us if it was OK to devalue their currency
(making it hard for our companies to compete), heavily tax our
products going into their country (the U.S. doesn't tax them) or
to build a massive military complex in the middle of the South
China Sea? I don't think so!" Trump said on Twitter.

So he's railing on China for purposely depressing the value of
its currency, the yuan - which has fallen a whopping 5% in the
last six months - and putting heavy taxes on US goods going into
the country while the US does not tax Chinese goods coming into
our country.

Pretty much all of that is untrue.

The bit about the South China Sea buildup, though, is very real.
And it's a reason the Obama administration started its "pivot to
Asia" policy - to build a bigger US presence in the region. It's
also part of the reason officials argued for the all-but-now-dead
Trans Pacific Partnership trade deal.

They saw it as a way of cementing US soft power with China's
neighbors.

Falling yuan

Lets break down Trump's un-truths first. China hasn't been
purposely devaluing their currency, the market has been doing it
for them. The Chinese economy has been slowing down at a very
steady clip since 2014.

That is because the government is trying to guide the economy
through a difficult transition from one based on manufacturing
and exports, to one based on the service sector and domestic
consumption. To do that, though, a country needs a strong
currency.

So right now, it's not in China's best interest to watch its
currency fall. When it does, people take their money out of the
country too, making the situation worse. The government has
been spending capital trying to guide the yuan down slowly. And
it's responded to outflows by tightening capital controls, which
has allowed it to avoid selling down foreign exchange reserves at
the rate of $100 billion a month, according to Societe Generale's
analysis.

Again, not an ideal situation, especially for a country
that is struggling with trillions in debt in its banking in
corporate sectors.

caption

These outflows are a scary situation for China — one a stronger yuan would help to mitigate.

source

Societe Generale

Trump's assertion that the US doesn't slap tariffs on
Chinese goods is also incorrect. According to
CBS News, Chinese products are subject to tariffs of
2.5% to 2.9% coming into our country - but that's not even the
whole story. The US has retaliated against China on a number of
fronts in terms of trade. I'll give you one
example.

For years the US steel industry has been concerned over
Chinese steel flooding the market, depressing prices around the
world. The US, in turn, slapped tariffs of 500% on Chinese
steel. It's also filed 11 suits against China with the World
Trade Organization since Obama took office.

And then there's the truth

In August, the Asia Maritime
Transparency Initiative (AMTI), a unit of the Center for
Strategic and International Studies, published satellite imagery
of several unidentified hexagonal structures on Fiery Cross,
Subi, and Mischief reefs.

"I'm afraid we still don't know for sure what the structures are,
beyond saying that they appear defensive in nature," Gregory
Poling, director of AMTI, told Business Insider about the
hexagonal designs.

China has claimed veritable dominion over the waters in the
South China Sea, one of the world's busiest waterways for trade.
A few months ago the Permanent Court of Arbitration
invalidated Beijing's vast territorial claims
over the water after The Philippines filed a suit against the
country.

So one out of three - not exactly the best score for the
future President of the United States. And again, it's unclear
whether or not Trump knows that the Chinese economy has changed
recently, or if he's trying to distract from his breach of
protocol.